Spain approves compensation tax on oil, gas drilling

The Spanish government has approved a tax on hydrocarbon production designed to compensate regional and local governments for shale and deep-sea oil and gas extraction.

It is not yet clear if the tax will be levied on test drilling nor when it will come into force as it will require parliamentary approval, an industry ministry spokeswoman said.

The government also approved higher land occupation fees for oil and gas developers and a payment equivalent to 1% of the value of production for the owners of land affected by oil and gas drilling.